In the opinion letter, the DOL opines that employers are prohibited from designating more than 12 weeks of leave (or 26 weeks of military caregiver leave) as FMLA leave. The DOL acknowledges that employers can provide additional leave to employees who have exhausted their 12-week FMLA leave allotment, or who have not yet qualified for FMLA leave, but the DOL’s position is that employers cannot characterize this time as protected FMLA leave. Further, if an employee uses paid leave for a portion of his or her absence for reasons that would qualify them to take unpaid FMLA leave, the employee’s paid leave must run concurrently with the FMLA leave and not be used to extend it.

The DOL also takes the position in the opinion letter that once an eligible employee communicates a need to take leave under the FMLA, neither the employer nor the employee can decline FMLA protection for that leave and instead preserve protected FMLA leave for future use. As soon as the employer has sufficient information to determine that the employee is eligible for and entitled to take FMLA leave based on present circumstances, the employer must notify the employee that it is designating the time off as FMLA leave within five business days, unless there are extenuating circumstances. Therefore, even if the employee would prefer to delay the designation of their leave as FMLA-qualifying so they can first exhaust available paid leave before taking unpaid FMLA leave, the employer cannot do so and must designate the leave as FMLA leave as soon as the determination is feasible. This opinion letter marks a sharp departure from the Ninth Circuit Court of Appeals’ holding in Escriba v. Foster Poultry Farms, Inc. – namely, that an employee may use non-FMLA leave for an FMLA-qualifying reason and preserve available FMLA leave for future use.

To comply with this recent DOL guidance, employers are advised to assess eligibility and entitlement to take FMLA leave as soon as they are put on notice of a potentially qualifying condition; to designate leave as FMLA leave as soon as possible, providing written notice of designation within five business days; to ensure that employees’ paid time off runs concurrently with FMLA leave; and to provide no more than 12 (or 26, if applicable) weeks of FMLA leave. This is true even if employees would prefer that their employer delay the FMLA designation, or if the employer is willing to treat more time off as subject to FMLA protections.

On January 17, 2019, New Jersey’s governor and state legislators agreed to a deal that will raise the state’s minimum wage to $15.00 by 2024. The current minimum wage in New Jersey is $8.85 an hour. Under the new law, the state’s minimum wage will increase to $10.00 an hour on July 1, 2019, and to $11.00 on January 1, 2020, with a steady one-dollar increase occurring every January 1 until 2024.

In addition, on February 19, 2019, Illinois’s governor signed a law that will raise the state’s minimum wage to $15.00 by 2025. The current minimum wage in Illinois is $8.25 an hour, but under the new law it will increase to $9.25 an hour on January 1, 2020, and $10.00 on July 1, 2020. The minimum wage will then increase by one dollar per year every January 1 until 2025.

Further, the City Council of Fremont, California unanimously voted to increase its minimum wage to $15.00 per hour by July 1, 2020 for employers with more than 26 employees and July 1, 2021 for employers with 25 of fewer employees. Similarly, Pasadena, California’s City Council voted to raise the city’s minimum wage to $15.00 an hour by July 1, 2020 for larger employers and July 1, 2021 for smaller employers.

Lastly, on March 1, 2019, the minimum wage in both the city and county of Santa Fe, New Mexico increased to $11.80 per hour.

Michigan Paid Sick Leave

As we previously reported here, Michigan’s new Paid Medical Leave Act is scheduled to go into effect soon. Employers with non-exempt employees working in Michigan have until March 29, 2019 to get their policies and recordkeeping systems ready for the new law.

New York City Prohibits Hair Discrimination; Requires Employers to Provide Lactation Room

The New York City Commission on Human Rights recently released legal enforcement guidance regarding race discrimination on the basis of hair. The guidance specifies that New York City employers with four or more employees cannot discriminate against Black employees by prohibiting “twists, locs, braids, cornrows, Afros, Bantu knots, or fades which are commonly associated with Black people.” Further employers cannot have grooming policies that require employees to alter the state of their hair to conform to the company’s appearance standards (including requiring employees to straighten or relax their hair), and policies cannot ban hair that extends a certain number of inches from the scalp, thereby limiting Afros. Covered employers that choose to enact grooming or appearance policies should be aware that they cannot prohibit or discourage such hairstyles, either explicitly or implicitly, and cannot discriminate against and/or harass Black employees based on their hair texture or hairstyle.

As we previously mentioned here, effective March 18, 2019, New York City employers with four or more employees must provide a sanitary “lactation room” for employees needing to express milk. The room cannot be a restroom, and both the lactation room and a refrigerator suitable for breast milk storage must be within a close proximity to the work area of the employee using it. The lactation room must have an electrical outlet, a chair, a surface on which to place a breast pump and other personal items, and nearby access to running water. Further, by the same date, covered New York City employers must implement a written lactation accommodation policy, which must state that employees have the right to request a lactation room and identify the process for requesting a lactation room.

New Jersey Expands Employee Leave and Benefits Laws

On February 19, 2019, New Jersey’s governor signed Assembly Bill 3975, which significantly broadens the reach of the New Jersey Family Leave Act (“NJFLA”) and the New Jersey Temporary Disability Benefits Law (“NJTDBL”). This new law imposes additional obligations on smaller employers who were previously exempt from the NJFLA. Moreover, the law amends the state’s Security and Financial Empowerment (“SAFE”) Act by granting paid family temporary disability leave benefits for covered time off involving domestic and sexual violence.

The new law extends coverage of the NJFLA to employers of 30 or more employees beginning June 30, 2019 (previously only covered employers with 50 or more employees). Additionally, the following changes to the NJFLA are effective immediately:

The law expands the once restrictive definition of “family member” to also include parent-in-law, sibling, grandparent, grandchild, domestic partner, or any other blood relative as well as any other individual with which the employee has a close, family-equivalent relationship; the new definition matches that in other New Jersey leave laws;

The law revises the definitions of “family leave,” “child,” and “parent” to provide broader protections for foster parents and people who become parents through a gestational carrier;

The law broadens the leave period for employees taking reduced-schedule FLA leave from 24 consecutive weeks to 12 consecutive months; and

The law requires employers to allow employees to take intermittent leave for birth or adoption of a child, placement of a foster child or the birth of a child via a gestational carrier.

Further, the new law expands the monetary benefits that are available under the NJFLA and the NJTDBL for leaves beginning on or after July 1, 2020. First, the law will increase the number of weeks for which benefits are available from 6 to 12 weeks in any 12-month period, and will increase the amount of intermittent leave available for covered employees from 42 to 56 days. In addition, employees who take leave under the NJTDBL will be entitled to 85% of their average weekly wage, subject to a maximum of $860 per week.

Finally, as the new law provides for penalties for failure to post required notices and provides money for public outreach to inform employees of their rights, New Jersey employers should promptly review and update their leave policies to comply with these new requirements.

]]>https://www.employmentlawworldview.com/state-law-round-up-minimum-wage-hikes-il-nj-ca-nm-michigan-paid-sick-leave-new-york-employee-rights-new-jersey-leave-and-benefits-expansion-us/feed/0shennan.harris@squirepb.com, melissa.legault@squirepb.comBelgian social partners reach agreement on employment conditions for the next two years. Or do they?https://www.employmentlawworldview.com/belgian-social-partners-reach-agreement-on-employment-conditions-for-the-next-two-years-or-do-they/
https://www.employmentlawworldview.com/belgian-social-partners-reach-agreement-on-employment-conditions-for-the-next-two-years-or-do-they/#respondFri, 08 Mar 2019 10:19:50 +0000https://www.employmentlawworldview.com/?p=7356Continue Reading]]>Group of 10 reaches agreement on employment conditions

In the very early morning of 26 February, the Belgian social partners in the so-called Group of 10 (the main representatives of employers’ federations and trade unions) reached the bones of an agreement on employment conditions for 2019-2020.

In this draft agreement, the margin for increases in Belgian salaries is set at 1.1%. This means that in addition to indexation salaries may be increased by up to 1.1% over the next two years without that increase being considered as exceeding the wage norm. This cap is designed to ensure that the cost of employment in Belgium remains competitive in relation to neighbouring countries.

Over the following months, it is intended that this margin of 1.1% will be further implemented at an industry-specific level, where it will be determined how individual sector employers should transpose this increase.

The draft agreement also allows employers to increase the amount of voluntary overtime on offer from 100 to 120 hours per year. Voluntary overtime does not give rise to a right to time off in lieu, only overtime pay. It is a productivity measure.

In addition, the maximum financial contribution of employers to the cost of public transport for the daily commute of their workers is increased from 64 to 70%.

There will also be enhanced possibilities for employees above 55 to decrease their working time by 1/5th or by half in order to improve mobility at the top end of the workforce age-scale and so increase opportunities for progression at the bottom.

Or have they?

The trade unions have not yet formally accepted the agreement. They had also insisted on an increase of the minimum wage by 10 – 40%, whereas the agreement only provides for an increase of that 1.1%. Will their membership accept this “weak” deal?

But there is also opposition from within the government. The draft agreement addresses the age of the so-called bridging pension, a Belgian regime whereby older employees who are made redundant receive an allowance from their former employer on top of their unemployment benefits. Since this regime has a detrimental impact on the activity levels of older employees by discouraging their re-entry to the workforce, it was generally agreed that the minimum age for the bridging pension should increase. 62 became the general rule yet for employees made redundant as part of a collective dismissal or company closure, the social partners have agreed to postpone using even the age of 60 for one year, leaving it at 58 for now, much to the dismay of some political parties. Wishing to be seen to make the right noises in advance of the elections in May 2019 is no doubt in large part to blame for their public indignation on what is, in terms of numbers, mostly a symbolic issue.

What does this mean for you as an employer?

For now, you can sit back and watch the political spectacle. By the end of the month we will know whether the unions formally support the agreement. If they do, it is over to the social partners to translate the deal into industry-level collective labour agreements. And if they don’t? Well, then we should probably brace ourselves for more political fireworks.

]]>https://www.employmentlawworldview.com/belgian-social-partners-reach-agreement-on-employment-conditions-for-the-next-two-years-or-do-they/feed/0marga.caproni@squirepb.comDéjà Vu All Over Again: U.S. Department of Labor Previews New(-ish) FLSA Overtime Exemption Requirements (Again)https://www.employmentlawworldview.com/deja-vu-all-over-again-u-s-department-of-labor-previews-new-ish-flsa-overtime-exemption-requirements-again/
https://www.employmentlawworldview.com/deja-vu-all-over-again-u-s-department-of-labor-previews-new-ish-flsa-overtime-exemption-requirements-again/#respondThu, 07 Mar 2019 23:26:22 +0000https://www.employmentlawworldview.com/?p=7354Continue Reading]]>For years – spanning two Presidential administrations – employers have been awaiting long-anticipated updates to the overtime exemption regulations to the Fair Labor Standards Act (FLSA). Since 2004, to be exempt from the FLSA’s overtime compensation requirements under the so-called “white collar” exemptions (e.g., executive, administrative, professional employees), employees must be paid on a salary basis at least $455/week as well as perform specific, defined exempt duties. In 2016, during the latter stages of the Obama administration, the Department of Labor announced that it was implementing new regulations that would raise the salary threshold requirement to $913/week, a substantial increase that would have resulted in as many as four million exempt workers being reclassified to non-exempt overnight. But on November 22, 2016, shortly after the Presidential election, a federal district court judge in Texas enjoined the new salary threshold rule and, despite some further (and still ongoing) appellate skirmishing, effectively invalidated its implementation.

Since then, employers have looked to the present administration wondering whether, when, and to what extent the FLSA regulations may change. After much speculation, the Department of Labor released on March 7, 2019 a proposed rule to amend the overtime regulations. Under the proposed rule, workers who earn less than $679 per week ($35,308 per year) would be automatically eligible for overtime for all hours worked beyond 40 hours per workweek. This is an increase from the current threshold, but not as high as the threshold proposed by the Obama administration. Further, the salary threshold would be revisited every four years through new proposed rulemaking, rather than subject to an automatic annual lockstep increases as the Obama administration had endorsed.

The new proposed threshold incorporates methodology used in 2004, under the Bush administration, for determining which workers should, based on wages alone, be treated as overtime-eligible, but has been adjusted to reflect current average wages. Because the methodology has survived scrutiny for so many years, the new proposed rule may be less susceptible to judicial challenge for overreach than the Obama-era proposal. And, although not as sweeping as the prior proposed rule, if enacted, the amended regulations may result in as many as one million workers becoming overtime-eligible. There is no anticipated change to the duties tests, so reclassification – if any – will be based on salary alone. After a period of notice and comment rulemaking, a final version is expected shortly before the 2020 election. We will continue to update you as the rule advances and if and when it is adopted, along with advice on how to implement cost-effective business solutions to minimize the added costs associated with this change.

]]>https://www.employmentlawworldview.com/deja-vu-all-over-again-u-s-department-of-labor-previews-new-ish-flsa-overtime-exemption-requirements-again/feed/0laura.robertson@squirepb.comDepartment of Labor Says Employers Are Not Required to Pay Tipped Employees the Full Minimum Wage for Non-Tipped Activities (US)https://www.employmentlawworldview.com/department-of-labor-says-employers-are-not-required-to-pay-tipped-employees-the-full-minimum-wage-for-non-tipped-activities-us/
https://www.employmentlawworldview.com/department-of-labor-says-employers-are-not-required-to-pay-tipped-employees-the-full-minimum-wage-for-non-tipped-activities-us/#respondTue, 19 Feb 2019 23:50:00 +0000https://www.employmentlawworldview.com/?p=7328Continue Reading]]>Under the Fair Labor Standards Act (“FLSA”), employers are required to pay non-exempt employees a minimum hourly wage of $7.25. However, employers with “tipped employees” are able to pay such employees a cash wage of $2.13 per hour and take a “tip credit” toward their minimum wage obligation to make up the difference between the cash wage and the federal minimum wage. Importantly, the FLSA differentiates between tipped employees who perform “dual tasks,” such as incidental duties that do not produce tips, and employees who have a “dual job,” meaning they are employed by the same employer to do both a tipped job and a non-tipped job. The U.S. Department of Labor’s Wage and Hour Division (“WHD”), charged with enforcing the FLSA, recently changed its position on when employers must pay employees with “dual tasks” the full minimum wage for time spent on non-tipped activities.

On November 8, 2018, WHD issued an opinion letter stating that employers are allowed to pay tipped employees a tipped wage less than the federal minimum wage for hours spent on non-tip-producing duties that are incidental to their main job. Previously, the WHD operated under an Obama administration mandate known as the “80/20” rule, which required employers to pay tipped workers the full minimum wage for time spent on side-work duties that do not result in tips (such as filling saltshakers and rolling silverware) when those duties make up at least 20 percent of the worker’s weekly hours. WHD’s Department’s November 2018 opinion letter altered this policy, explaining that employers are not required to pay tipped employees minimum wage for hours spent on non-tip-generating work incidental to their main job.

On February 15, 2019, WHD issued two new guidance documents supporting the position outlined in the November 2018 opinion letter. First, it revised its internal Field Operations Handbook (at section 30d00(f)) and updated its website to be consistent with its new enforcement policy. In addition, it released Field Assistance Bulletin 2019-2, which explains WHD’s reasons for the policy change, among them, that the previous policy created confusion regarding whether federal law requires certain related, non-tipped duties to be excluded from the tip credit. Further, the bulletin states that the new interpretation applies to investigations both prospectively and retroactively, meaning that the change could impact ongoing litigation between tipped workers and their employers.

WHD’s new policy likely will provide more clarity for employers with tipped workers. However, it is important for these employers to remember that they are still prohibited from keeping tips received by their employees, regardless of whether the employer takes a tip credit under the FLSA. Further, employers are still required to make up the difference if an employee’s tips combined with his or her direct (or cash) wages do not add up to the minimum hourly wage of $7.25 per hour. Finally, this policy clarification applies only to interpretations of the FLSA; state minimum wage laws may differ, so employers are encouraged to consult with local counsel to ensure that they are compliant with both federal and state wage payment laws.

]]>https://www.employmentlawworldview.com/department-of-labor-says-employers-are-not-required-to-pay-tipped-employees-the-full-minimum-wage-for-non-tipped-activities-us/feed/0melissa.legault@squirepb.com, laura.robertson@squirepb.comNew UK HMRC Guidance when recruitment is a bit of a trialhttps://www.employmentlawworldview.com/new-uk-hmrc-guidance-when-recruitment-is-a-bit-of-a-trial/
https://www.employmentlawworldview.com/new-uk-hmrc-guidance-when-recruitment-is-a-bit-of-a-trial/#respondWed, 05 Dec 2018 16:39:09 +0000https://www.employmentlawworldview.com/?p=7159Continue Reading]]>It is a common feature in many sectors for potential new recruits to undertake a work trial prior to being offered a permanent role. This type of trial, normally undertaken without pay, has obvious potential for the exploitation of the would-be employee. It certainly leads to a grey area when it comes to National Minimum Wage (NMW) and National Living Wage (NLW) compliance through the question of “when is a work trial actually work?”

For a start, the potential recruit must be a worker in order to be eligible for NMW/NLW and so some form of contract between the company and recruit must exist. That will be easily inferred by HMRC from any conditions attached to the trial, such as confidentiality or health and safety obligations. After that, the activities being performed and time spent completing them must qualify as ‘working time’ for NMW/NLW purposes. HMRC has set out a number of factors which its new guidance says it will consider when addressing these questions:

whether a “work trial” is genuinely for recruitment purposes (if it is not, it will generally be considered to be work and the individual will be eligible to be paid the NMW / NLW) so the employer would need to be able to point to specific vacancies it is hoping to fill and show that the usual internal consents and budgets were in place, etc.

whether the trial length exceeds the time that the employer would reasonably need to test the individual’s ability to carry out the job offered (in the Government’s view an individual conducting a trial lasting longer than one day is likely to be entitled to the NMW / NLW in all but very exceptional circumstances);

the extent to which the individual is observed (ie suitability actively assessed) while carrying out the tasks;

the nature of the tasks carried out by the individual and how closely these relate to the job offered (where the tasks are different from those which the job would involve, this may indicate that the employer is not genuinely looking to test the individual’s ability, but rather to get the tasks carried out);

whether the tasks carried out have a value to the employer beyond testing the individual (where the tasks are carried out in a simulated rather than real environment, this will normally indicate that they do not have such a value and that the individual is not “working”);

whether trial periods are important (aside from recruiting) to the way the employer runs its business (for example, where trial periods are used by the employer as a means to reduce labour costs, this is likely to indicate that the individual is “working”).

As with all NMW/NLW guidance, this is not definitive and each situation will be judged on a case by case basis; however, the very fact that the guidance has been updated to address this issue demonstrates that it is something HMRC is coming across on a relatively frequent basis.

Employers which use unpaid work trials should ensure there are clear guidelines put in place regarding how these trials should be conducted, their duration, the activities to be undertaken and the dominant purpose of the trial. It will be crucial to be able to demonstrate to HMRC, should it come knocking, that the trial is there to assess competency as part of the recruitment process and nothing more than that.

]]>https://www.employmentlawworldview.com/new-uk-hmrc-guidance-when-recruitment-is-a-bit-of-a-trial/feed/0james.pike@squirepb.comUS Supreme Court Begins New Term with Three Arbitration Cases Set for Oral Argument in Octoberhttps://www.employmentlawworldview.com/us-supreme-court-begins-new-term-with-three-arbitration-cases-set-for-oral-argument-in-october/
https://www.employmentlawworldview.com/us-supreme-court-begins-new-term-with-three-arbitration-cases-set-for-oral-argument-in-october/#respondMon, 08 Oct 2018 00:31:37 +0000https://www.employmentlawworldview.com/?p=7050Continue Reading]]>We’ve been keeping you apprised of the many developments over the past few years coming from the United States Supreme Court and other courts concerning agreements between employers and their employees to arbitrate disputes arising out of the employment relationship. The Supreme Court’s decision last term in Epic Systems v. Lewis, which we discussed in our post here, garnered significant attention as it addressed the National Labor Relations Board’s (“NLRB”) several-years’-running position that arbitration agreements with class or collective litigation waivers illegally restrain employees in the exercise of concerted activity protected under the National Labor Relations Act (“NLRA”). In Epic Systems, the Supreme Court rejected the NLRB’s position, holding that class action litigation is court procedure and not a substantive right or an activity protected under the NLRA. The Court thereby preserved employers’ ability to limit disputes to individual claims in arbitration without running afoul of employee rights under the NLRA to act together to improve their work environment.

The Supreme Court’s new term began as it always does, on the first Monday in October. On the Court’s docket in its first month are three more arbitration cases – one of which also deals with class action litigation. All three cases involve various aspects of the reach or interpretation of the Federal Arbitration Act (“FAA”).

The Supreme Court heard its first arbitration case during Wednesday, October 3’s oral arguments in New Prime, Inc. v. Oliveira, (the First Circuit’s opinion below reported at 857 F. 3d 7). In this case, the Supreme Court is being asked to determine whether Section 1(a) of the FAA, which excludes certain transportation “workers” from the FAA’s purview, applies to independent contractors, in addition to the employees, of a transportation company. The Supreme Court also has been asked to address whether the application of the Section 1(a) exemption is a threshold issue that should be decided by a court before ordering a case to arbitration, even when the parties’ arbitration agreement contains a clear delegation provision assigning questions of the arbitrator’s jurisdiction to the arbitrator and not a court. In the case below, the First Circuit answered “yes” to the first question, finding that the term “workers” under Section 1(a) of the FAA includes traditional employees and independent contractors. If the Supreme Court adopts this interpretation, it could have a noteworthy impact on the transportation industry, which widely relies on the services of independent contractors. These individuals, in addition to employees, may not be subject to arbitration despite otherwise valid arbitration agreements between themselves and a transportation company. This outcome also could lead to the expansion of other laws that have traditionally been limited to the employer/employee relationship and not independent contractors. In the underlying decision, the First Circuit also held that the determination of whether the claims at issue are exempt from the FAA under Section 1(a) is a “gateway” question to arbitrability that should be answered by a court, regardless of a valid delegation provision in an arbitration agreement. The upshot of this outcome is that despite contractual language agreed between the parties stating that an arbitrator should decide whether he or she can hear a case, in part or whole, the Section 1(a) question is an exception to such a provision. Early commentators on the Oliveira oral argument believe the Justices’ lines of questioning clearly indicated that the Court leans in the direction of a broad interpretation of the FAA exemption to include independent contractors, and that courts, and not arbitrators, should analyze the application of the exemption.

Lamps Plus, Inc. v. Varela, is scheduled for oral argument on October 29, 2018. It comes to the Supreme Court from the Ninth Circuit (opinion is reported at 701 F. App’x 67). This case arises out of the Supreme Court’s 2010 decision in Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., wherein it held that state courts cannot order class arbitration unless there is a contractual basis to do so. In Varela, the Ninth Circuit held that, under the contract law of California (the state by which the arbitration agreement at issue is governed), the parties’ intention to allow class and collective claims in arbitration could be inferred from the agreement’s commonly-used language, which in this case was, “arbitration shall be in lieu of any and all lawsuits or other civil proceedings.” The lower court concluded that the phrase “other civil proceedings” includes class actions, therefore, there was a contractual basis to find that the parties meant to replace class litigation in court with class litigation in arbitration. In its petition to the Supreme Court, Lamps Plus opposed the Ninth Circuit’s decision by arguing that under the FAA, class arbitration is disfavored because it is inconsistent with the purpose of arbitration to streamline litigation. Accordingly, it argued that parties to an arbitration agreement must clearly and explicitly authorize class arbitration, or be limited to individual, bilateral litigation in the arbitration forum. This case provides the Supreme Court with the opportunity to define the contours of its holding in Stolt-Nielsen by explaining just how parties can indicate their assent to participate in class arbitration and whether the FAA precludes an inference in favor of class arbitration based on general contract language that does not specifically address class or collective litigation procedures. A less likely, but possible outcome would be for the Court to defer the FAA issue by ruling that the Ninth Circuit misapplied California contract law.

Also set for oral argument on October 29, 2018, is the third arbitration case on the Supreme Court’s docket this term. Although not an employment case, Henry Schein v. Archer & White Sales, Inc. (Fifth Circuit Court of Appeals decision reported at 878 F.3d 488), like Oliveira, addresses whether a court or an arbitrator should be charged with making threshold determinations about the arbitrability of claims. In this case, the parties had entered into an arbitration agreement stating they would resolve all legal disputes in arbitration, except claims for injunctive relief and involving intellectual property rights. The plaintiff’s case included a claim that sought injunctive relief among other remedies; he thus argued that the court where the case was filed should refrain from ordering the parties to arbitration because the claim seeking injunctive relief was not arbitrable. The defendants argued that the terms of the arbitration agreement provided that any questions about the arbitrability of the case or a specific claim was to be decided by the arbitrator. The trial court’s magistrate judge found that the arbitration agreement’s delegation language, when combined with the language carving out claims for injunctive relief, could reasonably be interpreted in both manners suggested by the parties. However, the District Court judge and the Fifth Circuit both discarded this interpretation, and instead found that the defendant’s claim that the parties to the arbitration agreement intended the arbitrator to handle the arbitrability of a carved-out claim was “wholly groundless.” Although its analysis was brief, the Fifth Circuit held that the language of the parties’ arbitration agreement was clear and the court should determine the arbitrability of the entire litigation when it included a carve-out claim, such as injunctive relief. The defendants’ case before Supreme Court argues that the “wholly groundless” doctrine used by the Fifth Circuit is too subjective and violates the federal policy favoring arbitration expressed in the FAA. Having suggested their lean toward court determination of arbitrability issues in the Oliveira argument, the Supreme Court may take a similar tact in Henry Schein. On the other hand, the Court could also distinguish this case by the fact that these parties agree they have a valid arbitration agreement that governs the terms of their arbitration, and not an overarching statutory exemption to arbitration such as exists in Oliveira.

Although employers can continue to feel confident that arbitration agreements with their employees are a valid mechanism to limit employment-related disputes to the arbitration forum, some of the contours of these agreements continue to be defined through ongoing litigation, such as the cases above. The outcomes in these cases may impact how employers draft their arbitration agreements to ensure parties get the exactly the arbitration they are bargaining for. Stay tuned as we continue to update you on the outcomes of these cases, and their effects on employer arbitration agreements.

]]>https://www.employmentlawworldview.com/us-supreme-court-begins-new-term-with-three-arbitration-cases-set-for-oral-argument-in-october/feed/0daniel.pasternak@squirepb.comEyes and Ears on the FLSA – U.S. Department of Labor Issues New Opinion Letters and Schedules Public Listening Sessions (US)https://www.employmentlawworldview.com/eyes-and-ears-on-the-flsa-u-s-department-of-labor-issues-new-opinion-letters-and-schedules-public-listening-sessions-us/
https://www.employmentlawworldview.com/eyes-and-ears-on-the-flsa-u-s-department-of-labor-issues-new-opinion-letters-and-schedules-public-listening-sessions-us/#respondWed, 05 Sep 2018 16:15:13 +0000https://www.employmentlawworldview.com/?p=6997Continue Reading]]>On August 28, 2018, the Wage and Hour Division of the United States Department of Labor (“WHD”) issued four new opinion letters interpreting various aspects of the federal Fair Labor Standards Act (“FLSA”). In addition, the WHD has announced plans to analyze and consider changes to the FLSA’s white collar overtime exemption regulations applicable to executive, administrative, professional, and outside sales employees. To support this effort, the WHD has scheduled five public listening sessions in various locations across the country (a list of which you can find here), which it invites the public to attend and provide comment. The key questions to be addressed at these sessions surround the pros and cons of adjusting the salary basis – the salary level employees must meet in order to be deemed exempt under the white collar overtime exemptions. We will be sending representatives and encourage you to contact us with any questions or feedback you would like us to raise at these sessions.

Regarding the opinion letters, as you may recall from our prior blog posts (for example, here and here), the WHD resumed issuing opinion letters in mid-2017. Opinion letters are official written interpretations of the FLSA, as those laws apply in specific factual situations. Although the opinion letter topics are generally brought to the WHD by a specific person or entity, as you will see from below, many of the situations they present have broader applicability to a range of employers. Keeping abreast of the WHD’s opinions can help employers avoid the pitfalls embedded in the nuances of the laws it enforces. Below is a summary of these new opinion letters, and a link their text:

Voluntary employer-sponsored wellness events not compensable time under the FLSA. Employees who voluntarily participate in employer-sponsored wellness activities, such as biometric screening, health and gym classes, or benefits fairs that are designed to lower an individual employee’s health insurance policy premiums and provide other benefits to employees that does not relate to the performance of their job, and from which the employer obtains no financial benefit, predominately benefit the employee, therefore they are not compensable work time under the FLSA.

Non-profit professional credentialing organization graders are “volunteers” under the FLSA. A non-profit organization who administers professional exams necessary for professional credentialing selects a group of its credentialed members to serve as exam graders for a period of 1 or 2 weeks, whereby they travel to testing locations to perform these services. The organization pays the direct expenses related to the graders’ travel. Graders report they perform the services willingly in the effort to give back to their professional community and to the credentialing organization. Under the FLSA, individuals who provide services to non-profit organizations may be properly classified as volunteers if they offer their services willingly without any expectation of compensation, free from any coercion or undue pressure. Under the circumstances presented by the credentialing organization employer, exam graders meet this standard and can be unpaid volunteers.

Internet payment software platform sales employees may be exempt from FLSA overtime. Employees may not be entitled to overtime if they 1) work in retail or service establishment, 2) earn a regular rate of pay that is more than 1 ½ times the applicable minimum hourly wage in a given workweek in which they work overtime, and 3) derive more than half of their earnings from sales commissions. This is known as the “retail and service establishment” exemption to the FLSA’s overtime provisions. The WHD found that an employer whose business is selling internet payment software platforms to retailers and others who sell products online, was considered a “retail sales entity” because it sold its platform directly to the user, in small quantities, for the user’s own use in business, rather than re-sale (such as wholesale sales). This was not changed by the fact that the employer’s sales are made predominately online. Accordingly, the organization’s employees who meet the earnings requirements above may be exempt from overtime.

Movie theater overtime exemption applies to in-theater-restaurants. The FLSA exempts from overtime all employees of establishments that are primarily engaged in the exhibition of motion pictures (the WHD defines “primarily engaged” to mean at least 50% of the available operation time is spent showing movies). The exemption applies to all employees of a qualified establishment, regardless of the work they perform. This recent opinion letter clarifies that movie theaters with in-theater dining, and even some with onsite, full-service restaurants, may qualify for the movie theater exemption if the food service is “functionally integrated” with the theater operations. Based on the facts presented in the letter, movie theaters with in-theater dining will qualify for this exemption if the food service and theater operations share common: 1) physical premises without a distinct barrier or separation; 2) business, financial, and other record keeping, such as entity name, taxes, and payroll; and 3) employees, and their primary source of revenue is showing movies.

On July 26, 2018, the California Supreme Court ruled in Troester v. Starbucks Corporation that the federal de minimis doctrine does not apply to a California employee’s class action wage claims. This ruling will have widespread impact, particularly on those employers with large numbers of non-exempt employees such as retailers and food service providers, as employers are now required to pay employees for even the small amounts of time spent on incidental work that occurs prior to clocking in or after clocking out.

The employee in Troester, a non-exempt Starbucks supervisor, argued that Starbucks should pay him for the roughly 4 to 10 minutes each day he spent on tasks related to closing the store after clocking out. These tasks included activating the alarm, exiting the store, locking the front door, walking coworkers to their cars pursuant to Starbucks’ safety policy, and other occasional tasks such as letting an employee back into the store to retrieve a forgotten item. The Court noted that over the 17 month period of employment, Troester’s time spent performing these unpaid tasks totaled approximately 12 hours and 50 minutes or about $102.67 in lost wages.

Starbucks argued that the federal Fair Labor Standards Act’s de minimis doctrine applied to this case and excused Starbucks’ nonpayment of wages for these small amounts of otherwise compensable time. The Court first rejected Starbucks’ argument, finding that the Labor Code and the Industrial Welfare Commission’s (IWC) wage orders had not adopted the federal de minimis doctrine. In support of its findings, the Court pointed to the language contained in these statutes and regulations which emphasize that hours worked includes “all the time the employee is suffered or permitted to work.” By emphasizing that it includes “all” time, the Court found that California law is more protective than federal law when it comes to payment of wages.

Second, the Court rejected Starbucks’ argument that the Court should recognize the de minimis rule in light of the fact that it is part of the “established background of legal principles” upon which the Labor Code and IWC wage orders have been enacted. In its ruling, the Court found that the Labor Code and the IWC wage orders are clearly concerned with small amounts of time given that employees receive 10 minute rest breaks. Along with this observation, the Court noted that it implicitly rejected a de minimum intrusion of such time in Augustus v. ABM Security Services, Inc. The Court also found support for its holding because the IWC wage orders amended its language demonstrating an intent to depart from the federal standard for waiting time and other forms of travel time. The federal Portal-to-Portal Act relieves employers from paying minimum wages or overtime for certain activities such as walking to the actual place of performing the principal activity for the employer and other preliminary or postliminary activities. In response, the IWC amended its wage orders such that hours worked included these activities. In doing so, the Court found that the IWC intended for employers to pay employees for these small amounts of time. Finally, the Court noted that the modern availability of class action lawsuits and technology advances in employer timekeeping methods both undermine the de minimis doctrine.

This case will spark a new wave of California class action lawsuits focusing on those previously uncounted minutes and perhaps even seconds of time worked by an employee. With this risk of increased exposure, employers should review their timekeeping policies and procedures. Employers should also analyze each non-exempt employees’ duties and responsibilities and minimize the risk of any off-the-clock work.

]]>https://www.employmentlawworldview.com/minutes-count-california-supreme-court-rejects-de-minimis-doctrine-for-wage-claim/feed/0karen.wentzel@squirepb.com, michael.kelly@squirepb.com, squiresanders@lexblogauthors.comSleepovers and the NMW – clarity at last for the UK care sectorhttps://www.employmentlawworldview.com/sleepovers-and-the-nmw-clarity-at-last-for-the-uk-care-sector/
https://www.employmentlawworldview.com/sleepovers-and-the-nmw-clarity-at-last-for-the-uk-care-sector/#respondWed, 18 Jul 2018 13:06:32 +0000https://www.employmentlawworldview.com/?p=6867Continue Reading]]>The Court of Appeal handed down its much anticipated judgment on Friday last week in the joined cases of Royal Mencap v Thompson Blake and John Shannon v Jakishan and Prithee Rampersad (t/a Clifton House Residential Home). The decision provides much-needed clarity on whether workers are entitled to the national minimum wage for each hour during “sleepover shifts”.

Previous case law stated that this determination could only be made by applying a “multifactorial” approach which, in the words of Lord Justice Underhill, was “hard to understand” and created much uncertainty for employers (particularly within the hard-pressed care sector which it was estimated would be required to cough up an eye-watering £400million in back pay should each hour of a sleepover shift count as working time for NMW purposes).

One of the more complicated aspects of the NMW Regulations 2015 is the differentiation made between “types” of worker which impacts the assessment of what amounts to working time for NMW purposes. The Mencap judgment is particularly useful as it deals with the position on sleepover shifts for both time workers and salaried workers (this was necessary since the workers in the case were said to be time workers whereas the workers in Shannon were said to be salaried). The judgment also deals obiter with the position in respect of unmeasured workers.

Actual work vs availability for work

In coming to its decision, the Court noted the similarity between the provisions of the 2015 National Minimum Wage Regulations for time workers and salaried workers in this area (Regulations 32 and 27 respectively). In line with the legislation, it drew a distinction between “actual work” and “availability for work”. In “availability for work” cases, the Court noted the “sleep-in exception” provided for in the same terms at Regulations 27 (2) and 32(2) which states “hours when a worker is available only includes hours when the worker is awake for the purposes of working, even if a worker by arrangement sleeps at or near a place of work and the employer provides suitable facilities for sleeping”.

In his judgment, Lord Justice Underhill concluded that sleepers-in (where a worker is contractually obliged to spend the night at or near their workplace on the basis that they are expected to sleep for all or most of the period but may be woken if required to undertake some specific activity) are to be characterised as “available for work” rather than actually working and so fall within the sleep-in exception above. He noted that “the result is that the only time that counts for NMW purposes is time when the worker is required to be awake for the purposes of working”.

The importance of the decision cannot be undersold as it means that a number of previous cases on this point (Esparon v Slavikovska [2014], Whittlestone v BJP Support [2013] and Burrow Down Support Services Ltd v Rossiter [2008]) have all been wrongly decided. Lord Underhill did not hold back in criticising previous decisions made on the point, pointing out the “basic artificiality of describing someone as working – still more, as actually working – during a shift when it is positively expected that they will spend substantially the whole time asleep”.

Expectation of sleep vs permitted to sleep

It is clear from Mencap that the fundamental feature of a sleep-in arrangement is the expectation that the worker will sleep for the shift, unless woken for work (at which point the clock would start ticking for NMW working time purposes). This is essential as it allowed the case to be distinguished from the leading Court of Appeal case of British Nursing Association v Inland Revenue in 2002. This found that nursing staff were at work (rather than available for work) throughout the entirety of their shift when delivering an emergency-bank-nurse booking service whilst at home.

In determining that the nurses were “working” throughout the period, the key factors were that (i) the nurses were performing the same work as those nurses on day shifts; and (ii) whilst the nurses were permitted to sleep during periods of slack time, it was not the expectation that they would do so. Lord Justice Underhill noted about the case: “the decision certainly establishes that the fact a worker is entitled to go to sleep in the intervals between particular tasks is not necessarily inconsistent with them actually working during the entirety of the period”.

Going forward

As set out above, going forwards, the key question for employers when dealing with workers who may sleep during their shift, is whether the workers are either (a) working or (b) available for work. Key to this assessment is whether the worker is expected or permitted to sleep. Where a worker is expected to sleep, this clearly falls within the sleep-in arrangement in Mencap meaning pay is only due for NMW purposes during periods where the worker is awake in order to work. Where workers have specific tasks to fulfil but are otherwise permitted to sleep, this falls more clearly within the British Nursing Association rule, meaning the workers are working throughout the shift for NMW purposes.

Employers should try to make the position clear in staff contracts of employment, probably by reference to when the work being done on the shift arises. If you arrive to a certain set of tasks but are permitted a nap when they are completed, that is a different situation from arriving with little or nothing specific to be done but having to wake up to deal with anything new which arises mid-sleep.

Unmeasured workers

In contrast to the position for time workers and salaried workers, the Court noted that the Regulations concerning unmeasured workers do not contain “availability to work” provisions.

Nevertheless, many care providers have taken advantage of this type of working arrangement as it allows an agreement to be reached as to the average daily number of hours that a worker is likely to spend carrying out duties required under the contract. Provided the average agreed is realistic, it will apply for NMW purposes even if the actual number is slightly different.

Employers which operate daily average agreements will be pleased that the Court’s ruling here does not affect that arrangement, as it can be a useful way of providing certainty for both parties as to the pay due to a worker.

Final note

Whether this decision is appealed by the individuals involved is yet to be seen. However we hope (for clarity’s sake) that it is not.